Enterprise Value to FCFF (EV/FCFF)
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Danaher Corp. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to EBITDA (EV/EBITDA)
- Dividend Discount Model (DDM)
- Aggregate Accruals
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Free Cash Flow to The Firm (FCFF)
Danaher Corp., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The financial data reveals notable fluctuations in the cash flow metrics of the company over the reported years. Both the net cash provided by operating activities and the free cash flow to the firm exhibit an upward trajectory from 2020 through 2022, followed by a decline in 2023 and a slight recovery in 2024.
- Net Cash Provided by Operating Activities
- This metric increased significantly from 6,215 million US dollars in 2020 to a peak of 8,519 million US dollars in 2022, indicating improving operational efficiency or increased earnings translating into cash. However, a decline is observed in 2023 with 6,490 million US dollars, which represents a reduction of approximately 23.8% compared to the previous year. A modest increase to 6,688 million US dollars in 2024 suggests some recovery, though still below the 2022 peak.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow follows a pattern similar to operating cash flow. It rose from 5,694 million US dollars in 2020 to 7,678 million US dollars in 2022, reflecting an enhanced ability to generate cash after capital expenditures. Like operating cash flow, FCFF also experienced a decline in 2023 to 5,447 million US dollars, which is indicative of potential increases in capital spending, decreases in operating cash, or both. The slight rebound to 5,619 million US dollars in 2024 suggests stabilization but does not reach the prior high levels.
Overall, the cash flow trends suggest a period of growth and strong cash generation through 2022, followed by a downturn in 2023, with some improvement noted in 2024. The reduction in both operating cash flows and FCFF in 2023 may warrant further examination into operational challenges or strategic investments during that period. The partial recovery in 2024 indicates a possible return to more stable cash flow conditions.
Interest Paid, Net of Tax
Danaher Corp., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2 2024 Calculation
Interest payments, tax = Interest payments × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate demonstrates a general declining trend from 18.9% in 2020 to a low of 13.1% in 2022. Following this decrease, the rate increased to 16.3% in 2023 and slightly decreased thereafter to 16.1% in 2024. This pattern suggests an improvement in tax efficiency or changes in tax regulations or strategies up to 2022, with a moderate reversal or stabilization in the subsequent years.
- Interest Payments, Net of Tax
- Interest payments, net of tax, fluctuated over the five-year period. Starting at $268 million in 2020, they increased sharply to $377 million in 2021, indicating higher borrowing costs or increased debt levels. This was followed by a reduction to $302 million in 2022. In 2023, payments rose again to $328 million before a slight decrease to $310 million in 2024. These changes reflect variability in financial obligations related to interest, potentially influenced by changes in interest rates, financing activities, or debt management strategies.
Enterprise Value to FCFF Ratio, Current
Danaher Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| AbbVie Inc. | |
| Amgen Inc. | |
| Bristol-Myers Squibb Co. | |
| Eli Lilly & Co. | |
| Gilead Sciences Inc. | |
| Johnson & Johnson | |
| Merck & Co. Inc. | |
| Pfizer Inc. | |
| Regeneron Pharmaceuticals Inc. | |
| Thermo Fisher Scientific Inc. | |
| Vertex Pharmaceuticals Inc. | |
| EV/FCFF, Sector | |
| Pharmaceuticals, Biotechnology & Life Sciences | |
| EV/FCFF, Industry | |
| Health Care | |
Based on: 10-K (reporting date: 2024-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Danaher Corp., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| EV/FCFF, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| EV/FCFF, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
The financial data reveals several notable trends for the analyzed period.
- Enterprise Value (EV)
- The enterprise value showed an overall increase from 2020 to 2021, rising from approximately $174.6 billion to $210.6 billion, representing significant growth. However, this was followed by a decline in 2022, with EV dropping to $197.6 billion, remaining relatively stable in 2023 with a slight increase to $197.9 billion, and then a sharp decrease in 2024 to $162.6 billion. This pattern indicates a peak in enterprise value in 2021, followed by a downward correction over the subsequent years.
- Free Cash Flow to the Firm (FCFF)
- FCFF exhibited growth from 2020 through 2022, increasing from $5.7 billion to $7.7 billion. In 2023, free cash flow declined sharply to $5.4 billion, before recovering slightly in 2024 to $5.6 billion. This suggests a strong liquidity position improving until 2022, then facing some challenges before a partial recovery.
- EV/FCFF Ratio
- The EV/FCFF ratio decreased steadily from 30.66 in 2020 to 25.74 in 2022, implying that enterprise value growth outpaced free cash flow improvements initially, and then cash flow growth was strong relative to EV. However, the ratio spiked in 2023 to 36.34, the highest in the period, reflecting a disproportionate increase in enterprise value relative to free cash flow, or a significant reduction in cash flow against a relatively stable EV. By 2024, the ratio declined again to 28.93, moving closer to earlier levels but still above 2022’s low point.
In summary, the company experienced an initial increase in both enterprise value and free cash flow through 2021 and 2022, indicating growth and improved operational cash generation. However, from 2023 onwards, enterprise value declined notably, with free cash flow also reducing but to a lesser extent. The fluctuations in the EV/FCFF ratio suggest variability in market valuation relative to cash flow generation, with 2023 representing a year of reduced cash flow efficiency or a higher valuation multiple that partially corrected in 2024.